What to consider when buying a house from the bank

buying a house

The economic crisis of 2008 and the bursting of the bubble affected the real estate and construction sectors considerably, and one of its main consequences was that banks were left with a lot of real estates due to foreclosures and defaults.

This data serves as a reference: in 2012 alone, some of the most important entities in Spain such as Bankia, Banco de Valencia, Banco Sabadell or La Caixa, added more than 50,000 homes in stock for a value that exceeded 15,000 million of euros.

Given the situation, banks, almost forced to become real estate, were forced to prioritize the sale of their own homes, and many people saw an opportunity to invest or find real bargains.

The truth is that banks buy flooring is a way for many families or people with fewer resources or difficulties of access to a mortgage to buy a home at a more affordable price, as banks often offer better financing terms.

In addition, due to the urgency of the entities to get rid of these properties and the large supply, the mortgage conditions and discounts in this type of sale may be more attractive.

Advantages and disadvantages of buying houses from banks

Buying cheap bank houses is possible as long as we take into account some issues. Therefore, before making the decision, you should assess:

Advantages of buying houses from banks

  • Banks are interested in selling their homes quickly, which can generate interesting offers.
  • You will be able to obtain good financing conditions. As banks want to sell quickly, they offer preferential conditions such as full financing, long repayment terms, appraisals on account of the bank or more flexible payments (for example, through the lack of capital, monthly installments are lowered by up to 60 %).
  • When buying houses from banks, some entities offer their clients “reform checks”, worth up to € 5,000, to make improvements to the home.
  • The supply of bank flats and houses is quite high. The entities have their own portfolio of properties, with options for all types of clients (houses, flats, chalets, etc.).

Disadvantages of buying houses from banks

  • The houses are not new and may be damaged. As many of them come from embargoes, they have been inhabited for long periods of time and their state of conservation and maintenance is not always optimal.

→ It may interest you: How to detect hidden defects in a home?

  • They tend to be in less central areas. Most bank floors are not in the downtown neighborhoods of cities. Normally, these are farms in peripheral areas or far from the center, or promotions in small towns.
  • The interests of these properties are less negotiable than when we buy a home from a realtor or an individual. If we want to finance the house 100%, we will have to pay more interest and contract different insurance and financial products with the entity.
  • We will pay more tax. When buying houses from banks, the operation is taxed with the Property Transfer Tax (applied to second-hand homes), so we will not be able to benefit from the reduced rates of VAT. Proportionally, we will be paying more taxes for the transaction.

When am I interested in buying a house from the bank?

The requirements for buying a house from the bank are usually quite flexible. It is a good option if you do not have savings, since the bank can grant you 100% of the appraisal value and you can even finance the associated expenses (notary, opening commission or prior study, appraisal, management expenses, etc.).

In addition, the fees to buy houses from banks are usually lower, since mortgages are granted for more years (up to 40 in some entities), being an option for people with less income.

In any case, if you opt for this alternative, do not forget to review the fine print of the mortgage contract in detail and calculate well the costs of the total loan, since the longer the repayment term and the percentage financed, the more interest you will pay.

On the other hand, when buying this type of housing, you must do a market study. If you can take advantage of a good offer and it is foreseeable that the home will appreciate over time, then it will be a good purchase and even a good option to invest.

Even so, you should know that the real estate assets of entities are increasingly scarce, especially in well-located and higher-value areas of large cities.

7 Tips for buying houses from cheap banks 

At Sky Marketing we are experts in the real estate sector. Currently, we have an agreement with The Blackstone Group, an investment bank of North American origin that manages real estate investment assets in the United States and Europe, and which is already one of the largest investors in the sector in our country. For this reason, our portfolio of bank houses is very broad.

In our experience, these are some of the questions you should consider if you are considering buying a house owned by the bank:

Study the market

The price of bank houses is linked to the supply and demand of the market. Before you buy, find out about current prices and check home values in the neighborhood or town where you want to find a home.

Search and compare

Currently, most banks have a wide range of homes, with high-level flats that you can get at attractive prices. You can find good bargains as long as you are willing to spend time searching and comparing.

Visit the house

It is a basic rule of thumb before buying a home, regardless of who owns it. Only then will you be able to verify what the property is really like, what its facilities are like, what is the state of conservation of the building, etc.

Take advantage of the facilities of the banks

One of the basic tips before buying a house is to compare the mortgages that each bank offers us. In this type of housing, the conditions can vary a lot, and each entity will offer you advantages that you should assess. Our advice? Consult an expert.

Negotiate the price

Banks are clearly not going to give away or undersell their properties, and they are not willing to lose money either. However, due to the urgency of the sale, they are more open to negotiating and it is easier to adjust the final price of the sale.

Review the documentation

Before you buy a home from the bank, you should know why the foreclosure occurred. Also find out if the property has any type of associated debt (defaults with the community, with basic electricity and water supplies, etc.).

Contact Us

Real estate agencies like Tajarat properties have seen the opportunity for many people to buy houses from banks, and they have specialized in helping their clients carry out this operation. What are you waiting to contact us? We are your trusted online real estate agency!



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